The Basics Of A Trust Administration
Before we get started:
Definitions You Will Need To Know
1. Settlor: One who establishes a trust — a right of property, real or personal — held and administered by a trustee for the benefit of another.
2. Trustee: An individual or corporation named by an individual, who sets aside property to be used for the benefit of another person, to manage the property as provided by the terms of the document that created the arrangement.
3. Beneficiary: An organization or a person for whom a trust is created and who thereby receives the benefits of the trust. One who inherits under a will. A person entitled to a beneficial interest or a right to profits, benefit, or advantage from a contract.
4. A Living Trust: A property right, held by one party for the benefit of another that becomes effective during the lifetime of the creator and is, therefore, in existence upon his or her death.
What Is A Trust Administration?
When an attorney and either a surviving spouse, or the back-up trustees, work together to follow the directions written in the trust, and to make sure the trustees follow the requirements written of the law.
When a person passes away, and they have a living trust, the assets in that individuals trust must be given to the beneficiary that is next in line. If this individual is married, family trust assets go in to a sub-trust for the use of the surviving spouse.
A lawyer is vital to this stage because there are many state, federal, and county guidelines that must be followed to save time and money. There are also many time sensitive deeds and forms that must be submitted to ensure no further complications arise during this difficult time, like added expenses, or missed tax saving opportunities.
Emotions run high after the passing of a loved one. Having a trust administration takes the pressure off the individuals of the family to get all the assets allocated and the estate settled. Everyone receives what is stipulated in the living trust, just as the settlor(s) wanted.
1. The attorney reviews and explains the trust to the backup trustees or the surviving spouse.
2. A plan of action is outlined based on the trust’s language. In some cases input is needed from either the surviving spouse or the back-up trustees. Understanding the trust is critical to making informed decisions.
3. Assets are allocated in a timely manner.
Necessary Forms And/Or Paperwork Needed For A Trust Administration
1. The original trust plan
2. 4–5 death certificates
3. A list of future beneficiaries, along with their contact information
4. A list of trust assets, as well as the deeds/statements for each asset
A Critical Time
There is nothing easy about a time like this. That is why it is so important to have the necessary items in place to make this as smooth and painless as possible. You have worked hard, accumulated assets, and want to be able to pass those assets on to your loved ones.
If you are in the San Francisco Bay Area, please feel free to contact my office. We are in the heart of Silicon Valley, off of the beautiful Alameda in downtown San Jose.